The Supreme audit institution of the Republic of Latvia is State Audit Office (SAO). The SAO is an independent collegiate institution. The structure, scope duties of the SAO is determined by the Act on the Renewal of the State Audit Office Act of 2 August, 1923, passed on 4 November, 1993.
The responsibility of the SAO is to provide assurance to Saeima (Parliament) that the collection and expenditure of state budget and special budget as well as the use of state assets are legal, efficient, effective, economic and correct.
The scope of the SAO is:
After the renewal of the Audit Act work began to reorganise the SAO to comply with the requirements of the Act and the Latvian Constitution. We had reorganise the structure of the SAO, recruit staff and with the cooperation of the Ministry of Justice, prepare subordinate legislation, namely the Audit Regulations which was passed by Parliament on 7 September, 1995. The State Audit Regulations legislates in more detail the scope of audits, auditor’s rights and duties as well as auditees’ rights and duties.
Contacts and cooperation with other audit institutions and their international organisations began in 1994. On 17 October, 1994 the SAO was accepted as a member by the supreme audit institutions organisations INTOSAI. Since May 1995 the SAO is also a member of EUROSAI.
Practical and continuous relationships have developed with the other two Baltic nations – Estonia and Lithuania. Regular meetings of the senior staff are held to resolve audit issues which are similar in all Baltic nations. Towards the end of 1995 a seminar was held in Vilnius to discuss internal control issues and the introduction of audit standards for financial audits.
The State Audit Office of the Republic of Latvia is divided into the Budget Audit Department and the State Owned Enterprises Audit Department. The Budget Audit Department audits collection and use of the state budget and special budget resources and the use of state assets. The State Owned Enterprises Audit Department audits the collection and use of state assets in all public and local government enterprises and organisations as well as the economic activities of companies, banks and individuals if they manage any orders and deliveries.
During 1995 the Budget Audit Department completed 209 audits.
The Budget Audit Department collegium has reviewed audit documentation from 34 audits.
Surcharges totalling Ls 114 760,88 have been imposed of which Ls 108 005,40 has been collected.
During 1995, the Department has forwarded audit documentation to the Prosecutor’s Office in four (4) cases to determine whether Criminal proceedings many be initiated.
During 1995, the State Owned Enterprises Audit Department completed 109 audits. Surcharges totalling Ls 108 111,35 have been imposed. The Department has forwarded sixteen (16) audit documentation to the Prosecutor’s Office in sixteen (16) cases to determine whether criminal proceedings may be initiated.
The Department has prepared an informative summary of the Latvian Republic’s foreign debt. The information covers the period from 1992 to the end of 1994. As at 1 January 1995 the total was Ls 195,5 million. The above information plus appendices (113 pages) was forwarded to the Parliamentary Budget and Finance Committee, the Cabinet, Ministry of Finance and Latvian Reserve Bank.
An analysis of the major problem areas encountered during audits in 1995 led to the view that major issues were concerning restructuring government owned enterprises into government owned Shareholding companies, determining their capital structure and improving their accounting.
Audit results during 1995 indicate that the SAO will have to pay special attention to the following problem areas:
Since the renewal of the Audit Act and introduction of the Audit Regulations and despite the problems which interfere with the SAO’s ability to maximise its performance, the SAO’s impact on the following areas of concern can be noted: